An Interview With Michael Pachter, Gaming Analyst Extraordinaire

GamingBolt's Pramath Parijat and Wedbush Securities' Michael Pachter discuss a number of hot gaming topics.

Posted By | On 14th, Apr. 2016

An Interview With Michael Pachter, Gaming Analyst Extraordinaire

You know Michael Pachter, I know Michael Pachter, the world knows Michael Pachter. Love him or hate him, you cannot ignore him- his frequent loud spoken opinions on everything and anything gaming, including many things that are held sacred, have earned him the ire of the gaming community. And yet Pachter’s record speaks for itself- he is a man with his finger on the pulse of the industry, and he has previously correctly predicted many trends and developments that have gone on to pass.

It is because of that record, and his well defined and consistent opinions on everything, that we at GamingBolt decided to have a chat with him about any and everything gaming. During our chat, we covered a lot of things- from upcoming games, to VR, to the future of the console industry, and of course, the Nintendo NX. Strap in for the ride.

[Note: This interview originally took place before GDC. Some information here may be accordingly outdated.]

15 Amazing Facts That You Probably Don't Know About Uncharted 4

"I’m sure Uncharted 4 will be great- Naughty Dog just do great work."

What are your thoughts on the numerous delays that Uncharted 4 seems to have suffered? Do you think the delays indicate some kind of development troubles? We already know Naughty Dog underwent a staff changes during this game’s development, and it keeps getting delayed, even now- the most recent excuse was disc manufacturing! Do you think it could have something to do with possible issues with the game’s development? Or maybe to do with the release of Ratchet and Clank in April, which is another major first party PlayStation 4 exclusive?  

Well, Ratchet and Clank is going to be completely unrelated to Uncharted, except if Sony feels that the timing of both those games’ releases could drive sales differently. I mean, I don’t- they have different audiences, so I don’t think it would make much of a difference. I’d sort of understand if both games were launching the same day- but launching a week apart, they can still manage the promotion, and, you know, i think that parents with children under the age of 12 are the ones who would be buying Ratchet and Clank, while the parents themselves, or teenaged gamers, would be the ones getting Uncharted. So I think it’s a different audience, and I don’t think it matters as much if they launch on the same day, so I’d say no, the delay has nothing to do with the launch of Ratchet.

Of course, there are development issues– I wouldn’t say there are problems, you know, it could be as simple as the Naughty Dog guy deciding they want to add to the game, or they ran into something that wasn’t the way they wanted it to look, and they had to fix it. And that’s not necessarily a problem. I think that one of the things that’s kind of refreshing about Naughty Dog is that their game quality is extremely high, and we as consumers tend to forget that, and act like they just get everything perfect on the first try. I’d say that it’s more remarkable that their games so far have come out on time. So, when there’s a crack in their armor, a chink, and they don’t get the game out exactly the day that it’s expected, people start looking for excuses. But it’s entirely possible that this game is just so ambitious that they didn’t give themselves enough time to try and meet their goals. So now, it’s taking them an extra few months to make the game perfect.

I think you will end up being quite delighted with the final product, and I don’t think the delays make any difference to anybody in the world, except for maybe some very hardcore gamers. I’m sure Uncharted 4 will be great- Naughty Dog just do great work.

So you don’t think that Naughty Dog may have had issues transitioning to the PlayStation 4, for instance?

I mean, I don’t know enough people there to know that… I couldn’t tell you,as far as i know, the only key person to have left Naughty Dog in the last five years has been Amy Hennig, who wrote the first three Uncharted games, and maybe also The Last of Us. But, for all I know, she also did some work on Uncharted 4, that story was written.

But I have not heard of any executive producer level,or lead artist level people who left- so i would imagine that there is nothing seriously wrong at Naughty Dog. And as far as PS4 becoming a hang up goes, everything i have heard is that development for PS4 is relatively straightforward, not particularly complicated. The PS3, because of its architecture and its cores, was just too hard to figure out. And I think some people have had problems with the memory on the PS4, and how to allocate it, but a Sony internal studio isn’t going to have that kind of problem- they’re going to get full support from Sony. And of course, any third party studio is going to get support from Sony as well, I think Sony is pretty good about that. But yeah, Sony would prioritize its support, and make sure its internal studios get everything early. So I would say no- any delay probably has nothing to do with the PS4.

So it’s just creative reasons causing the delays, then?

Yeah. And again, I think we have never played a Naughty Dog game, or certainly not with this management, this team, where we felt cheated, that we didn’t get our money’s worth. So I think no- if anything, this will be a bigger game than anything they have ever released, I think people will be extremely happy.

So do you think Uncharted 4 could become the highest selling title in the franchise? Do you think it could have the most successful launch?

You know, I mean- the PS4 install base is not even half of the size of the PS3 install base,so probably not. But if you measure this 2-3 years from now, then maybe. Once the PS4 gets to an install base of 65-70 million units, then sure. But not this year.

But wouldn’t you say that the hype for Uncharted 4 is higher than the hype for any previous game in the series has been? Surely that plays a factor- like God of War 3 launched on a smaller install base compared to the first two games, and still sold the most, because the PS3 audience was more engaged, and hype for the game was higher.

Yeah, I mean obviously, there’s familiarity with sequels, and there’s an install base with fans. So, yes. But I think this is generally true of all games now- I mean, if you read the press release from Ubisoft, The Division was the highest selling first day title in Ubisoft’s history- higher than any other game that Ubisoft has ever made. And it’s a new IP- I mean, obviously, we’re all familiar with it, since there was the beta, and we saw it at E3 for two years on a row. But the fact is, that this new game has sold more copies in its first day on the market than any Assassin’s Creed,or Far Cry, or Watch Dogs… it’s pretty amazing. And I would not have guessed that.

What that is telling you is that there are so many gamers paying attention to commentators like you, who are, they’re on it. Games are so well publicized in advance. So sure- I think Uncharted 4 is getting way more publicity than any previous game in the series, and probably more than any Sony first party title before, ever.

Sticking with Naughty Dog for now, do you think there might be a The Last of Us 2 any time in the future? Do you think that a release of a new one is inevitable, so to say?

I’m not in the business of guessing what someone is going to do next (laughs) I mean, let’s talk about Take-2, and how a new Red Dead has been in the works for 2014,2015, and 2016, and it’s still not out, and so… sure, The Last of Us 2 is coming. I don’t know if it’s coming out this year, or the next year, or the year after, but it’s easy to just assume that every game that’s ever been successful will receive a sequel.

You know, I actually never finished that game, so I don’t know how it ended- I don’t know if somebody died, or the planet exploded… I don’t even know- is a sequel even possible? Without spoilers, I mean, though I’m not going to go back and finish it.

michael pachter

"I didn’t enjoy The Last of Us enough to just stick with it."

Well, without spoiling it, I can say that a sequel in the same world can happen.

Ah. I didn’t enjoy that game enough to just stick with it. It just didn’t interest me enough.

I’m sure you know what’s going on with Microsoft lately- Microsoft are moving all of their games to Windows 10, they’re sort of discussing developing a Windows-Xbox ecosystem. And I guess my question is, is this a long run plan to transition the Xbox from being a console to being a service? Are they trying to just get out of the console business with this in the long run?

I think you said it backwards- I don’t think that they are trying to get out, I think that it is inevitable that consoles will go away eventually. So I would say that it’s fair to presume that after this console cycle, each succeeding console cycle will be about half as big as before. And the reason for that is not fewer people playing games- the reason for that is more people playing games. But they’re going to be playing games on other devices. And by devices, I think we’re going to continue to use our home television as the monitor, the display, for the game.

But think about what a game console is, and why it was invented. You know, back in the 1970s and 1980s, when consoles were first invented, the folks who made arcade games decided that, you know, they looked at the arcade machine, and it was a monitor, a joystick, and a CPU and GPU inside a big box. And the console makers decided to take the CPU and GPU, and put that into a dedicated console, then hardwire a joystick to it, and then hardwire that to the television in the hall. And at the time, and certainly in 1985, when the NES came out, very few homes had PCs. You know, you can go back and look, but the IBM PC and PC Junior were early 80s, and the Mac was 1984 – that was the big ad campaign – so, they were just beginning to penetrate homes back then. And, so the console was a relatively inexpensive alternative.

I had a PC in 1985. And I remember, it cost me $3300. Which was, at the time, something like 10% of my pay, it was a lot of money. But it was something that I thought, ’that’s really cool, I really want one.’ But you can imagine now, paying 10% of your pay for a PC, you know… I am sure if you are a lower income household, maybe it costs that, but- low income households are making $5000, and you can get a pretty decent PC for $500.

Even today I would say, in the US, the average household income is $40000-$50000- so a decent PC costs literally 1% of take home pay, versus 10% 30 years ago.

So the point is that now, PCs are actually a very acceptable alternative to consoles. And the thing that was missing back in the 80s and maybe the 1990s, and certainly continuing on maybe till today, was we don’t know how to connect our PC to the TV. Now when I say ‘we’ don’t know how, I’m sure you’ll get a thousand comments on your site saying what a moron I am, because it’s really easy, run a wire from this port to that… but, you know, how many people do you actually know who have a PC connected with their TV- it doesn’t happen.

But now, what’s interesting is if you have a Chromecast Stick, or a FireTV, or an Apple TV, or a Roku, it’s pretty easy to connect any box to your TV, and- you know, Apple has AirPlay, and there are lots of different ways to do it. And if you think back in the 1980s and the 1990s and even the last decade, let’s go with 2005, when the Xbox 360 came out- how many CPU/GPU combinations do you think most households had? And the answer is, probably one- one PC! Now, how many do they have? Because my household – admittedly I am above median income – but we have four iPhones, two MacBooks, two Surface Pros, four iPads, and I think we have four or five PCs. That’s approaching twenty! And they are, the CPUs at least, pretty consistently powerful. The GPUs are not- yet. But if you think about the chipset that powers the Xbox One – the integrated SoC – the GPU part of that can’t cost more than $50. I’m sure the SoC total is $100, at most. So if you find the specs, and I don’t know the specs, of that GPU, and then go look at a comparable Nvidia GPU… Once the price of that GPU drops to $10, which will happen in the next 4-5 years, then why would anybody make any device that has a display, a phone or a tablet or a PC, with less power that that card? No one will! So, the point is, beginning, I’d say 2018, with the iPhone 8 and the Surface Pro 5, you’re going to see every CPU/GPU brand manufactured in 2018-19 being as powerful as an Xbox One or a PS4. And I think it’s only a matter of time before the Activisions and EAs of the world say, if you want to play Call of Duty or FIFA, and you don’t have a console, we’ll gladly sell it to you, and you can download it to your PC or phone or tablet, and plug in your FireTV or Roku or Apple TV, or new TVs that will have smart apps that let you connect to your devices directly- but what the hell? Play your game.

I mean, if you are Amazon- I get asked this a lot, what is Amazon’s involvement in gaming? Why did they buy Twitch, or Double Helix, or their new game engine? Why are they doing all this? Because Amazon sees exactly what I see, and I think Microsoft is acknowledging that this is going to happen. So Amazon would’ve for everybody who plays a gammon their TV to use a FireTV box and use an Amazon controller to play, and I am sure they would love you to download your game through Amazon, so they can collect their royalty on it. And I would imagine if you are Activision or EA, and say ‘gosh, here we are in 2020- there are 50 million households on the planet who have a CPU/GPU faster than an Xbox One… why not offer our gamete them?’ And in 2025, there’ll be 200, 300 million households on the planet who have fast CPUs and GPUs. Why not double the addressable market for our game, or triple it?

EA sells something like 18 million units of FIFA a year to 150 million console households- but if there are 2.5 billion people on the planet with internet access, what do you think FIFA sales would be now? At least double. Same with Call of Duty, same with any game. So I think Microsoft’s Windows 10 integration is just and acknowledgement that thesis coming. And they would like to be the relevant platform, they would like games to be played on whatever CPU/GPU combination you choose, using Windows 10. So they stay relevant.

15 Ways to Enhance Your Experience on PS4 and Xbox One

"I think the addressable market for consoles will be halved, but they’ll always be a reason for some people to buy them."

So I wanted to discuss this idea that you have floated of the ‘death of the console,’ so to speak. I actually wrote an editorial recently, and it was based on something Phil Spencer said, which was that Microsoft might be looking at moving towards shorter console cycles, and having marginally improved Xbox’s so to speak, released every few years. This is a fairly popular idea- Sony and Nintendo have discussed it too.

I guess my question is, do you think that Sony, Microsoft, and Nintendo moving towards shorter cycles will help consoles stay relevant?

Well, I think that consoles can be that CPU/GPU combination I was talking about- and there’s always going to be a place for them, which is why I said that, you know, I think the addressable market for consoles will be halved, but they’ll always be a reason for some people to buy them. I’m just talking about, you know- look at the Nintendo DS and 3DS- sales have been cut in half, because a lot of people who bought the DS are now playing games on their phones. And they are happy with that.

And the fact is that in 2016, there are probably a billion more people playing games on their phones than there were in 2006- so the addressable market has expanded dramatically. All I am saying is, and this is where Nintendo is going, if you offer an experience comparable to DS and 3DS on your phone, you’ve got a billion people who will look at it, not 100 million- so the big opportunity is there.

And I think everybody sees it. And Sony will try to stay relevant, just like Nintendo is trying to stay relevant. And what Sony is trying to do is offer streaming services. They are trying to offer television, which is why we have PlayStation Vue. You know, they are trying to offer a lot of different things, that their box is different for. And of course, there will be the PlayStation VR.

And Microsoft is making Oculus work through Xbox- they’re trying to stay relevant, and for a meaningful number of consumers, they’ll all stay relevant. I’m just saying, if the next generation consoles launch, and the box is $300-$400, and the publishers all say, ‘we’re gonna be on the Xbox Next or whatever it’s called, and PS5, but you can also play that same exact game, but without a console, then some people will say, ‘well screw that, we’re not buying a console!’ And I don’t think anyone can stop that- it’s in the publisher’s best interests to allow their content to be enjoyed anywhere.

The analogy is movies. And if the movie studio only allowed you to see their movie at a theater, their revenue would be smaller. That’s the way it was a hundred years ago. But now, you can see movies in theaters, or on discs, or on premium services like HBO, or on demand, like on Netflix… there are a bunch of different ways to see movies. And some of us don’t go to theaters as much as we used to. And that doesn’t mean theaters are all closed, it just means theaters are no longer the dominant place where people see movies. And you can do that math- if you looked at the box office, say the US, which is valued at $11 billion, and you consider that the average ticket price is $8… well, you only have sales of 1.2 billion or so movie tickets, for 300 million people. So the average is 4 movies in the theater per person. And I guarantee you, we see more than 4 movies a year- we see more than 8. More than 20. Because we watch them at home, on DVD or Netflix. So I would guess that the actual contribution of theaters to revenue is 20%, and the same exact thing will happen with consoles. Console game experience will be 20-30% of game consumption, and off consoles will be the balance.

So basically the overall gaming market expands, but consoles have a smaller share of that bigger amount.

Yes, exactly. And that’s how it should be. It’s the same thing for anything, I mean think about sports! Before television, if you wanted to watch a football game, you had to go to the stadium. And with television, I know a billion people watched the FIFA world cup, but how many people actually attended? The answer is 100,000. You know, so, a billion watched it, but only 100,000 were there! A tenth of a percent!

So expanding distribution, you know, from the traditional model dramatically expands the market. So yes, more people will enjoy games if you remove the obstacle of having to spend $300-$400 on a console. You’ll get a lot more people playing games.

Industry Personality of the Year 2015 Phil Spencer

"Phil Spencer is a game guy, but he’s a Microsoft game guy."

So looping this back to Microsoft, you think they’ll continue putting more of their games on PC for precisely this reason? 

Yeah. I think Microsoft is positioning themselves for the inevitable, which is you won’t need a console. They’ll continue to try to integrate, so they’ll continue to try to keep the console as relevant as possible, they’re not getting out of the console business, but you know, it’s the same thing-  you don’t need a PC to access the internet. You used to, but now you do it on your phone or tablet! And I have read that there are countries like Vietnam and India where more people access the internet through their phones than their PCs. I don’t know what the number is in a fully developed country, like in western Europe or the US, but I would imagine that it is north of 50% on PC. But I am sure the number drops every year.

Do you think that moving forward, there’s going to be a theme at E3 2016, at least as far as Microsoft is concerned, with the Xbox-Windows ecosystem, of them trying to keep themselves relevant across an evolving market and the present market?

I think that is probably right. We’ve had a couple of changes at Microsoft. You don’t have Steve Ballmer running the company anymore, and I think that Nadela, who is the current CEO, is absolutely focused on keeping Microsoft relevant. One aspect of Microsoft’s business is its software, Windows, and obviously they have a Cloud business as well. But I think Xbox was an island before Nadela moved up, and I think Ballmer didn’t really understand it. I’m not sure that Nadela understands it, but he definitely has a strategy to integrate Xbox into everything going on at Microsoft.

If you look at the leadership at Xbox- although Robbie Bach was a career Microsoft guy, there was Peter Moore, who was from Sega, followed by Don Mattrick, who was from EA. And currently it’s Phil Spencer, who is a 20-something year Microsoft employee. So instead of having a game guy run it, which was the case for the first thirteen years of Xbox, you suddenly have an internal Microsoft guy running it. And I just think it makes sense that they’re now part of the team. I don’t mean to suggest that Peter or Don weren’t good teammates, but I think they were game guys first.

And Phil is a game guy, but he’s a Microsoft game guy. He went to work there when he was an engineer. He worked there in the ‘90s, when they had Windows, and Excel. That’s the company he went to work for. I think he morphed into a game guy, but I actually think they’re far more unified today than ever. And I think they’re all on the same boat, rowing in the same direction now, and they weren’t necessarily doing that before Phil became head of Xbox.

So, yeah, the integration is going to be a theme at E3 according to you.

One would think. I mean, we don’t know how close we are to it. It was a modest theme when Microsoft had a showcase a couple weeks ago. It was sort of a theme, but it wasn’t crystal clear how it all worked together and it was primarily a game event. So my guess is E3 will still be primarily a game event, but each time they speak, we’ll get a little bit clearer picture of where they’re going.

Okay! And how about Sony? What do you expect from Sony at E3 this year, especially considering how last year they had a really memorable conference? With the Final Fantasy 7 remake, and The Last Guardian…

The Last Guardian for the fifteenth time? Is that coming out? Do we have a date yet?

Yeah, it’s… it’s supposed to come out this year, that’s what we do know.

Yeah. Yeah, when did we first see that game? 2006? I can’t even remember, it was so long ago!

We heard about it first in 2006, the first time we saw it was in 2010. But yeah, it’s been a while.

 Yeah. Yeah. It’s like- I would imagine the centerpiece of Sony’s E3 will be Agent from Rockstar (laughs) Was that ever cancelled?

No, but I gotta say, if you ever want to look at the ten biggest disappointments from E3 of all time, they would all be from Sony’s press conferences. And by disappointment, i don’t necessarily mean something bad happening at Sony’s conference- I mean something was announced which never showed up. I remember the PlayStation 3 press conference, before the PS3 ever came out, and they actually showed one of the characters from Red Dead Redemption… it was clearly a western from Rockstar, and Read Dead Redemption came out in 2010.

So… who cares what Sony will show at E3 this year? It probably means it won’t come out some time in the near future anyway. So, they could probably showcase The Last of Us 2, and say that’s coming ‘sometime.’

So the answer is… I think that PlayStation VR will be a big deal [at Sony’s E3 this year]. They’re showing it at GDC, hands on, and we’ve all seen it a bunch. I would imagine E3, that would be their big announcement. So you’re gonna have Oculus, and Vive in the marketplace by E3, and I think that Sony is kind of under the gun to announce pricing. So I think that will be the biggest announcement from Sony at E3.

And I’ve said it before, if it’s under $500, it’s going to be a bargain, and it’s going to probably take ton of share. because obviously if you’re one of the 35 million, now probably closer 40 million, PS4 owners, you can buy a PSVR headset, and that will work out of the box.

And a lot of people push back, and say that it’s underpowered… but, you know, I’ll have a better feel for this next week when I get my hands on it at GDC, but I don’t think most consumers really care. I think VR is fun, and it’s novel, and the point is, if I get a ‘dumbed down’ version of it for $500, instead of a super high quality one for $1500, I’ll take the $500 version all day long.

And I frankly think that VR now is still just a novelty… I mean, there’s nothing in VR yet that I look at and feel that I must have, and it’s a lot easier to spend $500 on something like that just for the novel experience, than $1500.

last guardian 16

"Who cares what Sony will show at E3 this year? It probably means it won’t come out some time in the near future anyway."

So just like the Kinect. It was a novelty, a gimmick, but people spent $150 on that novelty.

Right. Right. Exactly. Kinect wasn’t great, obviously, but it was okay. Now I don’t think that PlayStation VR- I mean, who knows, if they charge $1000, I’m completely off base. But I don’t think they will- if Oculus can do theirs for $600 and Vive for $800, because theirs has the hand controllers and stuff – I still think some of the internet commenters, who are like ‘Oh! Vive is better because of the hand controllers!’ – I’m perfectly fine holding a normal game controller to play a VR game. I don’t understand why i need motion controls, unless I’m playing a shooter. I’m perfectly comfortable, as long as there are crosshairs. I mean, that’s how we play regular shooters- we’re not using motion controls for Call of Duty. So I think the people who say Vive is worth it at that price, because you get those controllers are just…

So PlayStation has a chance to take a ton of share, and I think that will be the news this E3.

I think it’s interesting that you bring up Sony announcing games and then delaying them and then not bringing them out for years. Especially because that has happened with almost all of their first party games this generation, except for Bloodborne. The Order, DriveClub and Uncharted 4– these are all major games that were delayed. And I know you think there has been a trend in this direction for the last ten years, but do you think Sony being in the driver’s seat this generation has something to do with how often and freely they delay their games?

Oh, gosh. [snorts] I honestly think that each of these manufacturers is just overly ambitious. They all hope that they can get things out in time. Of the three, I would say Nintendo is by far the worst performer in terms of getting things out on time. In all fairness, they don’t promise them, so unlike Sony, Nintendo doesn’t lead us to believe there’s a brand new Zelda coming at the Wii U launch. They haven’t done that.

Unfortunately, though, Nintendo has such a huge following that people just expect. I mean, they have like thirty different big franchises. But people expect that one of the top five will come out every year, and they just haven’t been able to deliver, and I’m not sure why.

Whereas Sony… now, they don’t have as many big franchises, but they seem to get their big franchises out. The ones that get delayed are the lame ones. I mean, come on, The Last Guardian– however fun you think that’s going to be, it’s hardly Uncharted or The Last of Us. It’s a kind of a niche title. Shenmue is the same. It’s an okay title but outside of Japan, how many millions of units will it sell? Not very many. Rockstar is a different story, I think anything they put out will sell really, really well. But that’s not Sony’s fault. Sony’s fault is that they trust the Rockstar guys to get anything out on time, and they don’t, so…

So you think Sony’s big proposition for this holiday season is PlayStation VR? 

Yes, I do.

And what do you think Microsoft will have, then?

I don’t know. I have no idea. I mean, they have Gears, but I don’t think it’s coming out this year. It’s entirely possible that they’ll announce it for this holiday, of course…

I did want to discuss this about Microsoft- I’m sure you’ve heard about the Lionhead closure. Do you think this is an indication of something going on at Microsoft’s gaming division? Do you think them dropping such a big core studio is indicative of some kind of trend? 

‘A big core studio’ with small games, so…

Well, not really. Fable was one of Microsoft’s main franchises, after all.

I read somewhere, and this could be wrong, that all the Fable games combined sold only 7 million units- so that’s across three games, combined. Fable 1, 2, and 3 only sold 7 million units put together, and that’s not impressive at all. So, the fact is, it was a big, expensive studio, that was unproductive as far as sales go. Certainly, they created good content, well reviewed content, but not big sellers. And so, I think Microsoft made a business decision- this is a profit driven business, so, people are trying to make money. I don’t think Lionhead did a very good job of creating profitable franchises.

You could say the same thing about Rare, actually- I think Microsoft’s internal studios have not been particularly productive, with the exception of 343, and Bungie before that. They really, I don’t know, they have Black Tusk, I think it’s called The Coalition now- and I assume that they’ll end up being good, because Rod Fergusson is running the studio, and he managed Gears with Epic too. But, short other really big two franchises – Halo and Gears – they really haven’t done anything else. You know, it’s not like Ori and the Blind Forest is gonna keep Microsoft afloat. I mean, it’s a good game, but it’s not like it’s a giant seller or anything.

So this is an issue, don’t you think? Microsoft have had 16 years in the console market, and they’ve still totally failed to build up a stable first party content, of internal studios…

Well, ‘total failure’ is kind of an overstatement, considering Halo has done well.

Yeah, but still, it’s still just one. 

But it’s not a total failure!

(laughing) Okay, fine, a near total failure, then.

That’s five good games out of Halo. They’ve had a few exclusives that have done well, and I actually think Quantum Break- Quantum Break looks great, and I actually think that game is going to do very well, but… you know, they’ve had Titanfall, it did really well. Third party game, but still. So, you know, they’re okay. I just think…it’s a hard business. It’s hard to make consistent hits.

Microsoft Games Studios

"I think Microsoft’s internal studios have not been particularly productive."

I do want to discuss Bungie. Now, they put out Destiny, which got criticized, but it’s the biggest IP launch of this generation, or was anyway. It’s been doing well, it’s got a good fanbase, it even managed to turn its perception around with the release of The Taken King. But, you know, it’s sort of slowed down in the last few months, there haven’t been many updates in a while now. Do you think this is because Bungie is preparing something big? Do you think E3 2016 is where we see the next big expansion, or maybe even Destiny 2?

You know, Activision has been kind of quite about this, but they have announced a large expansion pack- and to put this into Activision speak, a regular expansion pack is just an expansion pack, so the $20 ones. The Taken King, they called a ‘mega’ expansion pack, and I have to tell you this language just pisses me off… but that was a $40 pack, so large expansion packs, I presume, are somewhere between $20 and $40- I don’t know, $30 maybe. But I don’t know that, though, because god forbid that they would just say that, they have to callout large versus mega versus small.

They’ve only announced one of these, and it has been since September when The Taken King came out… it has been six months since the large expansion pack. And gamers are getting fatigued, they are beginning to complain. I think if Bungie hopes to keep the franchise vibrant up until Destiny 2, they need content to drop at least every six months. So, I think the sooner they get this large one out, the better. I think it’s called a large one because I imagine the original plan was to have a ‘mega’ one out by now, and they couldn’t get enough content into it in order to get it out soon enough. And instead of holding off until August or September and releasing a $40 pack, it seems like they’ll release a $30 pack by E3, and that’s what happens. We don’t have a date yet, though.

And I think they’ll generate another expansion pack in the Fall- probably a regular, $20 one. Which is the content that they couldn’t pack into this one. And then I’m hopeful that they launch another one in Spring 2017, and then Destiny 2 launches Fall 2017. They haven’t given a date yet, but Activision did say that Destiny 2 is a 2017 event. So the right question is, do you announce Destiny 2 at E3 of 2016, and take the risk that people will stop spending money on Destiny 1? Or do you keep stringing them along, keep them buying expansion packs, so that you can hype Destiny 2 next year?

I would bet on the latter, but you never know with Activision. Remember, Activision doesn’t have a booth this year- so it’s actually entirely possible with their de-emphasized presence that they don’t announce anything. I don’t really know, though. E3 is an odd one this year, because EA is off the show floor, and doing a direct to consumer show. Activision is only appearing at the Sony booth with Call of Duty, which is odd… so, you’ve got me. I honestly don’t know. I wonder who’s taking EA and Activision’s spots on the show floor. They’re big, and they’re gonna be empty.

Didn’t Rockstar hint that they might be attending E3 this year?  

No… if you have been around as long as me, the last time Rockstar showed up at E3 was 2005, and they showed up in Summer of 2005, and literally a week or two before E3 is when Hot Coffee happened in San Andreas. And that was that sex scene. And the Rockstar guys were pretty adamant that that was just a hack, and then shortly after E3, it was revealed that the code for that scene had been in the game all along, and they had just locked it… so the hack just unlocked the code. And they were embarrassed, and they haven’t been to E3 since. In fact, as far as I know, they haven’t even spoken to the press much since. The Housers, I don’t think, have, at least. So I would bet that they don’t go to E3, and the thing I think is fascinating is, who cares? I mean, since 2005, they’ve launched GTA4 and GTA5, Red Dead Redemption, LA Noire, Bully, Midnight Club, Max Payne 3, Manhunt 2… and they haven’t been to E3 all that while.

So you don’t need Rockstar to be at E3 in order for Rockstar to have their game come out.

Okay then. Changing topics, I wanted to ask you- do you think that The Division will take a bite out of Destiny’s pie? Do you think that players might, as you said, they are getting fatigued, do you think they might jump ship? 

I think so. I mean, I think, it’s a similar game experience, it’s intended to fill that void. But the problem for Ubisoft I think is that Bungie kind of invented multiplayer, and Ubisoft has never had any successful long lived multiplayer games. So if Bungie can’t keep their gamers happy, what’s gonna happen to The Division players when Bungie does come up with a Division expansion? Will everybody switch back? I’m guessing yes. So who cares if there’s a temporary dip? I still think people will go back. If you can suddenly get 5 levels higher, and get all sorts of new weapons and dance on people’s graves, I think will go right back to Destiny. 

So like World of Warcraft? Some temporary dips, but people will keep returning to it?

As long as they keep it engaging, yeah, I think so.

Okay. I wanted to talk about Call of Duty. You briefly mentioned it before. Especially given how successful Black Ops 3 was, what do you expect from this year’s game, which Infinity Ward is making?

I think that the risk is that they make a bad game again- the likelihood is that with Dave Stohl running the studio – he’s the former co-founder, so he’s worked on great games – they’ll probably do a good job. But the last Infinity Ward game was Ghosts, and it was bad. So there’s always that risk. The upside is competition is far less severe this holiday- Battlefield is a bigger game that Battlefront, but you don’t have Halo, Fallout, or Assassin’s Creed this year. You very likely have Watch Dogs. And probably Mafia 3, but I don’t think that will be a huge game. So less competition, which means Call of Duty will probably do very well this holiday.

But who knows? Somebody- some rumor said it was set in World War 1? Which would shock me. They may go back to World War 2, but I think people like the whole concept of ‘modern warfare,’ and you can’t set it in World War 2 and call it Modern Warfare 4. I’d also be really surprised if they called it Ghosts 2. So we’ll see how it is. Probably not Advanced Warfare, and definitely not Black Ops, so what’s left? Either a new IP like Ghosts, or go back to Modern Warfare, which I think they know how to do. So that would be my bet.

nintendo nx

"I think Nintendo is desperately clinging on to an old business model that is passing them by."

Do you think Battlefield 5 will be a proper threat to Call of Duty?

Of course it will be. I just think that there’s less overall competition. Battlefield 5 itself will be great- it’s just that last year there were five games that took 60 million units of sales- Halo, Fallout, Battlefront, Assassin’s Creed, and Call of Duty. This year, on the other hand, there are only four games, and one of them, Mafia 3, isn’t as big as the smallest of those others. So if Mafia offsets Assassin’s Creed, and Battlefield does Battlefront… then Watch Dogs is competing for Fallout’s share, and what happens to Halo’s share? It needs to go somewhere, so it should be good for everybody.

I just wanted to know, what are your expectations from Nintendo and the NX?

I’ve no idea what that thing is going to be. I don’t think it’s coming out this year- Nintendo’s practice has been to show things a year, year and a half before they come out, so…I think they’ll show it at this E3, and I think it’ll come out next year. It might not come out in November, it might come out in March…

You know, it’s sounding an awful lot like it’s a handheld and console hybrid, where you have a handheld and you do some stuff on it, and the console will be like an Apple TV or something, and you can pull games down from that. I’m not really sure. Uh, I would say based on Nintendo’s recent history, it is not going to be very good. I know they are pretty excited about it, but I would say it’s a backward looking technology, that is just not an improvement over everything else that we’ve got an option to do, and it will completely miss the point that I made earlier about games getting away from consoles.

We’ll see. But I think Nintendo is desperately clinging on to an old business model that is passing them by. So… yeah.

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